The House committee on public accounts is set to begin its probe over a proposal by the Government Insurance Service System (GSIS) to increase the premium rates of its members.
Public accounts chair and Probinsyano Ako Party-list Rep. Jose “Bonito” Singson Jr. said there is a need to determine in aid of legislation the GSIS’s current financial state in connection with the proposed increase in member premium contribution, amid reports that the public sector insurer’s fund life-span is 10 years shorter than the Social Security System (SSS).
GSIS chief legal officer Luico Yu. Jr. earlier told Singson’s panel that the GSIS board is indeed studying proposals to increase the premium rates of members amid moves in Congress to pass measures granting additional benefits for government workers but in the process could strain the insurance firm’s finances.
According to Singson, officials of the state-run insurance firm were unable to respond satisfactorily to queries from committee members as to the financial status of the firm.
Neither did Yu nor his colleagues present a clear picture of the condition of investments made by GSIS to guarantee a sound financial position.
Singson said handling social pension funds for government workers is vital in guaranteeing additional benefits for members and “there should be a breakdown of your income from investments.”
“How much is coming from financial instruments; how much is the principal amount for investments and other important information,” Singson said as he lamented that GSIS officials were unprepared to brief them on the public sector insurer’s financial status.
Yu admitted that there are indeed plans to increase premium rates from members but stressed that “this has always been our last resort.”
“As much as possible we want to maintain premium rates but we also wish that benefits will be somehow stable. That has always been our position,” Yu told Singson’s panel.
He said the studies for additional premium were launched as the House of Representatives started to consider bills that would somehow affect the current financial state of GSIS.
One such measure is the lowering of the optional retirement age from 60 to 55. Another is the proposal to amend the GSIS charter to loosen up restrictions among single government employees to assign beneficiaries outside the list of primary dependents of the member.
Singson urged GSIS to study the possibility of adopting a policy that would relax the Charter provision affecting unmarried members. He said this would address promptly the concerns of single members, most of them public school teachers.
During the same briefing, GSIS manager Jenny Lobas disclosed that the firm maintains a fund life that would last until 2044, based on cash flow projections, benefits, contribution rates and other factors.
Singson warned that the GSIS actuarial life is ten years shorter compared to the SSS, following Lobas’ revelation adding that unlike GSIS, the SSS already imposed an adjustment in membership premium starting January 2021. (CMC)